About 2 weeks ago my stepfather unexpectedly passed away. I am trying to help my mother put together a plan to make sure she is set financially and I am looking for some advice.
My stepfather worked as a contractor selling annuities and made $200-300k a year. He was at full retirement age and was collecting social security. My mother is 60 and makes $75k a year plus bonus. She says she doesn’t want to retire until 70 but I don’t think she will wait that long.
Here is what I could ascertain about their finances:
Stepfather had about $20k in debt mostly related to his business. He has a leased car with a payment of $900 per month and a few months remaining on the lease.
My mother has two 401k’s from previous companies she worked for, one worth $70k and the other worth $200k. She also has an annuity worth $53k with a cash out value of $46k. She is the beneficiary of his life insurance policy worth $250k. The house is in both of their names and is worth about $350k and has $170k remaining on the mortgage. Property and school taxes in their area and are about $6.5k a year. She also has a leased car with payments of $800 a month and 2 years remaining on the lease.
My Plan for her:
1. Let all the debt expire (pretty much all were business related) in his name and turn in the lease in his name. They had very little in joint assets other than the house. 2. Turn in her lease and get something more affordable. 3. Cash out the annuity (I still don’t know why she bought it. I know she wants to leave it to me and my brother but she needs to worry about herself right now) 4. Paydown the house to around $100k and refinance to 15 years. She has excellent credit so she should get a top rate. My best estimates would put her payment around $1400. 5. Combine everything into one IRA at Vanguard and build a very conservative portfolio since she is so close to retirement age. If my math is correct it should be around $500k.
Feedback and suggestions are greatly appreciated.
Submitted July 09, 2017 at 05:53PM by thrdroc http://ift.tt/2sUW1w0
